Statutory Adjudication and the Constitution –

Some preliminary observations

Paul Brady B.L.

CBA Construction Law Conference

5th July 2014

2

TABLE OF CONTENTS

Introduction .............................................................................................................. 3

1. The requirements of natural or constitutional justice ...................................... 3

2. Determining the concrete requirements of fair procedures ............................. 7

2.1 First-principles reflection on the purpose of adjudication ........................ 7

2.2 Irish precedents on determining the requirements of fair procedures .. 11

2.3 The nature of construction adjudication under the 2013 Act ................. 12

2.4 Irish precedents on specific aspects of fair procedures .......................... 19

2.4.1 Adjudication in the absence of co-operation from a party ............. 19

2.4.2 Reliance by adjudicator on matters not addressed by parties ........ 21

2.4.3 Decision to hold an oral hearing ..................................................... 24

2.4.4 Decision to admit hearsay evidence ............................................... 25

2.4.5 Decision to permit cross examination ............................................. 26

2.4.6 Nature of the duty to give reasons ................................................. 28

3. Further practical guidance regarding fair procedures ..................................... 31

3.1 A general caveat with respect to reliance on UK materials .................... 31

3.2 Statutory guidance for adjudicators regarding fair procedures .............. 33

3.3 Some additional suggestions for good practice ...................................... 34

3.3.1 Considerations relevant at the appointment stage ........................ 35

3.3.2 Considerations relevant to the conduct of the adjudication .......... 36

3.3.3 Considerations relevant to the decision ......................................... 37

Conclusion ............................................................................................................... 38

3

STATUTORY ADJUDICATION AND THE CONSTITUTION –

SOME PRELIMINARY OBSERVATIONS

Paul Brady B.L.*

Introduction

This paper considers some of the problems and issues which may arise in the

operation of the adjudication process provided for in section 6 of the Construction

Contracts Act 2013 (‘the 2013 Act’) and the draft code of practice which, pursuant

to section 9 of the Act, has been prepared in the form of a schedule to a statutory

instrument and circulated by the Office for Government Procurement (‘the draft

code of practice’) in light of the requirements of natural or constitutional justice.1

It does not address other grounds upon which adjudication decisions, or their

enforcement, may be contested or resisted, such as, for example, challenges to the

jurisdiction of an adjudicator.2

The paper has three sections.

Section 1 offers a summary of the requirements of natural or constitutional justice

as these have been articulated by the Irish courts.

Section 2 considers how these general requirements should and might be

construed and applied in the specific context of construction adjudication and

with respect to particular issues (e.g. the right to an oral hearing, the admissibility

of hearsay evidence etc.)

In light of that analysis, section 3 considers some additional points of practical

guidance for good practice.

1. The requirements of natural or constitutional justice

For present purposes the relevant principles of Irish constitutional law can be

summarised as follows:

* BA (NUI), MA (Lond), LLM (Harv), DPhil (Oxon), Barrister-at-Law. © 2014.

1 This topic has already been the subject of a lecture given by Mr Justice Frank Clarke to Engineers

Ireland on 29th

January 2014 entitled ‘Adjudication – The Role of the Courts’. See <https://www.engineersireland.ie/EngineersIreland/media/SiteMedia/services/dispute-resolution/The-Role-of-the-Courts-by-Justice-Frank-Clarke-29-01-14.pdf> (last accessed 26

th June

2014). 2 For a concise discussion of jurisdictional issues, albeit with reference to the UK statutory scheme,

see ‘Guidance Note: Jurisdiction of the UK Construction Adjudicator’ (2nd

edn, December 2012) prepared by the Adjudication Society and Chartered Institute of Arbitrators <http://www.adjudication.org/sites/default/files/Guidance_Note___Jurisdiction_of_the_Adjudicator_2.pdf> (last accessed 26

th June 2014).

4

First, the two fundamental maxims of natural justice known at common law,

namely audi alteram partem3 and nemo iudex in causa sua,4 have been

‘subsumed’5 in Irish law into what the Supreme Court has termed ‘constitutional

justice’.6

Second, following the Supreme Court’s decision in East Donegal Co-Operative v

Attorney General,7 it must be presumed ‘that proceedings, procedures, discretions

and adjudications which are permitted, provided for, or prescribed by an Act of the

Oireachtas are to be conducted in accordance with the principles of constitutional

justice’.8

Third, the principles of constitutional justice can also be described, from the point

of view of any individual affected or potentially affected by such proceedings,

procedures, discretions and adjudications, in terms of that person’s constitutional

3 Lit: hear the other side.

4 Lit: no one a judge in his own case.

5 Goodman International v Mr. Justice Hamilton [1992] 2 IR 542 at 609 (McCarthy J).

6 See McDonald v Bord na gCon [1965] IR 217 at 242 (Walsh J); The State (Furey) v Minister for

Defence [1988] ILRM 89 at 99 (McCarthy J); Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 225 and 234 (Denham J). For an early Supreme Court decision dealing with the requirements of ‘natural justice’ at common law see Green v Blake and Others [1948] IR 242 at 269 (Black J). 7 [1970] IR 317.

8 East Donegal Co-Operative v Attorney General [1970] IR 317 at 341 (Walsh J). The full passage state:

‘…the presumption of constitutionality carries with it not only the presumption that the constitutional interpretation or construction is the one intended by the Oireachtas but also that the Oireachtas intended that proceedings, procedures, discretions and adjudications which are permitted, provided for, or prescribed by an Act of the Oireachtas are to be conducted in accordance with the principles of constitutional justice. In such a case any departure from those principles would be restrained and corrected by the Courts.’

See also Glover v BLN Ltd [1973] IR 388 at 425 (Walsh J) (quoted with approval in Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 203 (Murray CJ):

‘It is sufficient to say that public policy and the dictates of constitutional justice require that statutes, regulations or agreements setting up machinery for taking decisions which may affect rights or impose liabilities should be construed as providing for fair procedures.’ (emphasis added).

See also in re Haughey [1971] IR 217 at 264 (O'Dáilaigh CJ):

‘...in proceedings before any tribunal where a party to the proceedings is on risk of having his good name, or his person or property, or any of his personal rights jeopardised, the proceedings may be correctly classed as proceedings which may affect his rights, and in compliance with the Constitution, the State, either by its enactments or through the Courts, must outlaw any procedures which will restrict or prevent the party concerned from vindicating these rights.’

It is not wholly clear on the face of the six judgments in Dellway Investments Ltd v NAMA [2011] 4 IR 1 dealing with the constitutional right to fair procedures whether such a right may only be invoked by a party whose constitutional rights are liable to be directly affected by the decision in question. Compare, for example, the dicta of Hardiman J at 285-6 and 288-9 with those of Fennelly J at 326-9. For a detailed discussion of the differences between the judgments in this regard see Kenny, ‘Fair Procedures In Irish Administrative Law: Toward A Constitutional Duty To Act Fairly In Dellway Investments v Nama’ Dublin University Law Journal 34 (2011) 47 at 59-71. The issue is academic for the current discussion in that entitlements arising under a contract are undoubtedly a form of property for the purposes of at least engaging a person’s constitutional property rights. See Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 287-8 (Hardiman J) and cases cited therein.

5

right to fair procedures under Article 40.39 or, correlatively, from the point of view

of the decision-making authority, in terms of that authority’s ‘constitutional

duty’.10

Fourth, the principle of nemo judex in causa sua can be understood as a

specification or natural corollary of a more general principle of (or right to)

adjudicative impartiality. A further corollary of this principle of impartiality is the

so-called ‘rule against bias’, which may be formulated summarily as follows: no

person shall be a judge in a case where she is affected by bias or where, if she

were to act ‘a reasonable person in the circumstances would have a reasonable

apprehension that the applicants would have not have a fair hearing from an

impartial judge on the issues.’11

Fifth, the principle of audi alteram partem can be understood as comprising, at a

minimum, two distinct categories of rights designed to protect, respectively, (1)

the opportunity to know the case being made against one (or the proposed

decision that is liable to affect one’s rights, interests or privileges12) and (2) the

opportunity to be heard and to make one’s own case in response.13 In essence, the

9 In re Haughey [1971] IR 217 at 264 (Ó Dálaigh CJ); Kiely v Minister for Social Welfare [1977] IR 267

at 281 (Henchy J); The State (Irish Pharmaceutical Union) v. Employment Appeals Tribunal [1987] ILRM 36 at 40 (McCarthy J); Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 227 (Denham J), 283-5 (Hardiman J) and 322 (Fennelly J).See also:

Maguire v Ardagh [2002] 1 IR 385 at 566 (Denham J):

‘Taken with other fundamental rights protected under the Constitution, it illustrates the human rights foundation in this basic law. The rights protected include not only good name but also rights of due process and fair procedures.’

Re Eurofood IFSC Ltd [2004] 4 IR 370 at 419 (Fennelly J):

‘The principle of fair procedures in all judicial and administrative proceedings is, in Irish law, a principle of public policy of cardinal importance. It derives both from the rules of natural justice of the common law and from constitutional guarantees of personal and individual rights.’

10 See McCormack v Garda Siochána Complaints Board [1997] 2 IR 489 (Costello P) at 500 (quoted

with approval in Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 203 (Murray CJ), 282 (Hardiman J) and 322 (Fennelly J):

‘Constitutional justice imposes a constitutional duty on a decision-making authority to apply fair procedures in the exercise of its statutory powers and functions.’

11 Bula Ltd v Tara Mines Ltd (No. 6) [2000] 4 IR 412 (SC) at 441 (Denham J, as she then was), applied

by Supreme Court in Kenny v TCD [2008] 1 ILRM 241 at 245, O’Callaghan v Mahon [2008] 2 IR 514 at 666 and O’Ceallaigh v An Bord Altranais [2011] IESC 50 at para 35 (Fennelly J). This test is reflected in the wording of paragraph 4 of the draft code of practice to be made under section 9 of the 2013 Act – see 3.2 below. For detailed discussion, distinguishing different categories of bias and related tests, see generally Delaney, Judicial Review of Administrative Action (3

rd edn, Round Hall, Dublin 2013)

249ff and Hogan & Gwynn Morgan, Administrative Law in Ireland (4th

edn, Round Hall, Dublin 2010) Chapter 13. 12

See generally: Glover v BLN Ltd [1973] IR 388 at 425 (Walsh J); The State (Philpot) v Registrar of Titles [1986] ILRM 499 at 507 (Gannon J); Garvey v Ireland [1981] IR 75 at 97 (O’Higgins CJ); Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 288 (Hardiman J), 328 (Fennelly J) and 341 (Macken J). 13

On this twofold distinction between rights to be notified and rights to respond see Hogan & Gwynn Morgan, Administrative Law in Ireland (4

th ed, Round Hall, Dublin 2010) at [14.01] and, e.g.,

Glover v BLN Ltd [1973] IR 388 at 425 (Walsh J); Gunn v Bord an Choláiste Náisiúnta Ealaíne is Deartha [1990] 2 IR 168 (SC) at 179 (Walsh J); Mooney v An Post [1998] 4 IR 288 (SC) at 298 (Barrington J); Haughey v Moriarty [1999] 3 IR 1 at 75 (Hamilton CJ); and J&E Davy t/a Davy v. Financial Services Ombudsman [2010] 3 IR 324 at 360 (Finnegan P).

6

first category concerns the rights to timely and adequate notice.14 The practical

implications of the second category, the right to be heard, may include any or all

of the following: 15

right to adequate time to make or respond to representations;16

right to legal advice or representation;17

right to an oral hearing - encompassing the right to cross-examine,

personally or by counsel, one’s accuser or accusers (understood in the

broad sense); the right to give rebutting evidence; and the right to

address, personally or by counsel, the decision-making body;18

right to be informed of the reasons for the decision.19

Seventh, what, in any given case, is actually required by natural or constitutional

justice or constitutes fair procedures depends to a considerable extent on all of

the circumstances of the case.20 In short, while the duty to abide by fair

procedures is virtually absolute,21 the content of that duty is variable and typically

context-dependent. This is stated in emphatic terms in the following passage from

De Smith's Judicial Review22 which was cited with approval in Dellway Investments

Ltd:23

The content of procedural fairness is infinitely flexible. It is not possible to

lay down rigid rules and everything depends on the subject-matter. The

requirements necessary to achieve fairness range from mere consultation

at the lower end, upwards through an entitlement to make written

representations, to make oral representations, to a fully fledged hearing

14 Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 296 (Hardiman J): ‘It is trite law to say that a

right to a hearing carries with it a right to notification of the proposed decision and to sufficient detailed information, including criteria, as may be necessary to allow the person to be affected to make the best case he can against the decision which he fears.’ 15

See, e.g., Flanagan v UCD [1988] IR 724 at 731 (Barron J); and The State (Healy) v Donoghue [1976] IR 325 at 335 (Gannon J), cited with approval by Supreme Court on appeal at 349 (O’Higgins CJ). 16

Curran v Attorney General (unreported 27th

February 1941, High Court, Gavan Duffy J); O’Callaghan v Clifford [1993] 3 IR 603; and The State (Healy) v Donoghue [1976] IR 325 at 349 (O’Higgins CJ). 17

Burns v Governor of Castlerea Prison [2009] 3 IR 682 (SC). 18

See In Re Haughey [1971] IR 217 at 263 (Ó Dálaigh CJ) and Khan v HSE [2008] IEHC 234 at 16 (McMahon J). See also 2.4.3 and 2.4.5 below. 19

McCormack v Garda Siochána Complaints Board [1997] 2 IR 489 (Costello P) at 500; Mulholland v An Bord Pleanála (No. 2) [2005] [2006] 1 IR 453, at 460-1 (Kelly J); Rawson v The Minister for Defence [2012] IESC 26 at para 6.8-6.10 (Clarke J); Mallak v Minister for Justice, Equality and Law Reform [2012] 3 IR 297 at 322 (Fennelly J). See also 2.4.6 below. 20

See, e.g., Flanagan v UCD [1988] IR 724 at 730 (Barron J); Doupe v Limerick County Council [1981] IRLM 456 at 563 (Costello J) – both cited with approval in Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 227 (Denham J). See also: Irish Family Planning Association Ltd v Ryan [1979] IR 295 at 313 (O’Higgins J) and Keady v Commissioner of An Garda Síochána [1992] 2 IR 197 at 213 (O'Flaherty J). 21

Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 208 (Murray CJ), 227-30 (Denham J), 289-97 (Hardiman J). 22

6th

edn, 2007 at p 377. 23

[2011] 4 IR 1 at 333 (Fennelly J).

7

with most of the characteristics of a judicial trial at the other extreme.

What is required in any particular case is incapable of definition in

abstract terms.

In light of the fluidity in form of the right to fair procedures, the question naturally

arises as to what type of procedures are required if construction adjudication is to

be conducted in a constitutionally compliant manner. Given that the 2013 Act says

very little about the adjudication process itself, where along the spectrum

identified above by De Smith’s Judicial Review should it be located? There are two

aspects of construction adjudication in particular which may in practice give rise to

tensions with the constitutional right to fair procedures, namely its inquisitorial

nature and its tight timeframe.

The remainder of this paper addresses these and related issues. In section 2, I

discuss the principles relevant for concretising the requirements of fair procedures

generally and, more particularly, as they relate to construction adjudication. In

section 3, I add some additional points of good practice.

2. Determining the concrete requirements of fair procedures

One can distinguish several distinct but complementary lines of analysis by which

the abstract right to fair procedures can be rendered more concrete24 and applied

to the circumstances of construction adjudication. Running from the more general

to the more applied, these are:

First-principles / jurisprudential reflection on the nature or purpose of

adjudicative decision-making (2.1).

Irish precedents on the types of considerations to be taken into account

when determining what natural justice requires in a given situation (2.2).

The nature or purpose of construction adjudication as provided for by the

2013 Act (2.3).

Irish precedents discussing different aspects of fair procedures as they apply

to decision-making bodies or processes analogous to construction

adjudication (2.4).

UK precedents dealing with challenges to construction adjudication

decisions based on alleged breaches of natural justice (3).

I consider the first four points in the remainder of this section. In section 3 of the

paper I draw on UK precedents in discussing some further points of practical

guidance for good practice with respect to fair procedures.

2.1 First-principles reflection on the purpose of adjudication

24 I apologise for what is a bad though unintended pun. A more accurate alternative for ‘concrete’

(and cognate expressions relied on throughout this paper) is the Thomistic concept of determinatio but I have decided to err on the side of the vernacular.

8

The purpose of this sub-section is to provide some conceptual flesh to the familiar

but often bare-boned common-places about fair procedures. This might seem an

idle task but well-formulated ‘first principles’ can often provide valuable guidance

when dealing with areas of law that are highly fact or context dependent. Such

dependence means that clear-cut rules of general application will rarely be

available and case law will often be of limited precedential value. In practice, this

means construction adjudicators will be required to make judgment calls about

how to proceed fairly in any given scenario based more on a prudential application

of general principles of fairness than on conformity with a checklist of invariable

dos and don’ts. (Nevertheless, the time-pressed reader may prefer to skip to the

concluding paragraphs of this sub-section).

It is a sound practical principle25 of wide application (from ethics to engineering)

that form should follow function. In other words, how one acts should be guided

by what one is (or should be) intending to do. Our ends literally in-form our

means. Accordingly, one way to determine the concrete form which the general

requirements of natural or constitutional justice should take for a particular class

of decision-maker is to reflect upon the ends which that decision-maker should be

orientated towards. Or, as one of the great legal theorists of the 20th century, Lon

Fuller, neatly put it: ‘You cannot describe what a judge is doing without taking into

account what he is trying to do.’26

In the case of construction adjudication, what an adjudicator is ‘trying to do’ can

be considered at both a general and a more specified level. Staying at the general

level,27 the adjudicator’s ends are those of any person appointed to determine

effectively and authoritatively a dispute constituted by conflicting claims of

entitlement as between two or more parties. Thus, one core end or function of

such a process is to do justice between the parties by applying in a truly

reasonable way to the facts of the case all of the normative standards which are

relevant and appropriate given the nature of the entitlement at issue.28 In other

words (and where the entitlement claimed is one governed, say, by law and

contract) the goal is to apply the law and contract correctly, wisely and fairly.29

25 I use ‘practical’ here in its philosophical or Aristotelian sense, i.e. related to deliberate or

intentional human doing or making. 26

Lon L. Fuller, ‘Reason and Fiat’ (1946) 59 Harvard Law Review 376, 392. For a recent example of a theory of law which exemplifies this type of functionalist or purposive methodology by two distinguished Irish philosophers of law see Garret Barden and Timothy Murphy, Law and Justice in Community (Oxford University Press, Oxford 2010). 27

The more specific level is discussed below at section 2.3. 28

Or as Barden and Murphy conclude: ‘In societies in which it is thought that what is just is to be intelligently, reasonably, and responsibly discovered, the ideal is that an impartial, intelligent, reasonable, and responsible person is chosen toarbitrate.’ Law and Justice in Community (Oxford University Press, Oxford 2010) p 132. From the perspective of the jurist, the term ‘societies’ in this passage can be replaced with ‘constitutional orders’ and there can be no doubt that Bunreacht na hÉireann founds an order of the type described by Barden and Murphy. 29

These requirements are distinct and cumulative. There may often be several correct answers, hence the need for a wise or prudent decision as between them. There may also be various routes to such a decision, but the rights of the parties and, relatedly, the legitimacy and efficacy of the judicial process requires that it be arrived at through a process that both is and appears fair.

9

A second core end or function is to bring finality to the dispute by ensuring that

the adjudicative decision is made in a timely, authoritative and effective manner.

In this regard, both the moral authority and practical efficacy of an adjudicative

process depends, in various ways, on its fairness, both as a matter of substance

and perception.

The basic form which any adjudicative practice should take follows from these two

functions or ends. Speaking again at the more general level, I suggest the following

two principles of adjudicative ‘form’:

Formal principle 1: Adjudication takes into account, and must be seen

to take into account, all relevant considerations and only relevant

considerations.

The first formal principle speaks to the requirements of sound judgment generally,

of which sound adjudicative decision-making is but one type. From this

perspective the requirements of the common lawyer’s ‘natural justice’

traditionally marked out by maxims such as audi alteram partem and nemo judex

in causa sua (including its related rules against bias) can be seen as simply tried-

and-tested juristic rules of thumb that render more determinate this most

fundamental principle of good decision making.30 The various other rules of a legal

system dealing with, for example, evidence and witnesses or with the conduct of

proceedings prior to and during trial and so on are also intelligible as further

instantiations of this principle, all made with a view to establishing litigation

processes which are both manifestly fair and likely to facilitate well-informed and

reasonable judgments. Less formal processes of adjudication do not have to

replicate the letter of court rules, but they should be governed by the same spirit

or underlying principle of taking into account all and only relevant considerations.

Formal principle 2: Adjudication provides an effective opportunity to

the parties for argumentative participation in the adjudicative process

before a decision is made.

This second formal principle relates to the particular requirements of reasonable

and effective adjudicative decision-making. Fuller argued that what distinguishes

adjudication from other forms of social ordering, such as contracts and elections,

is that adjudication ‘confers on the affected party a peculiar form of participation

in the decision, that of presenting proofs and reasoned arguments for a decision in

his favour.’31 Indeed Fuller considered that judicial duties, such as to be impartial

and to hear both sides, were simply the rational consequences of this defining

mode and ideal of participation (what might be called ‘argumentative’

30 On the history of audi alteram partem in English common law and classical and Christian antiquity

see John M. Kelly, ‘Audi Alteram Partem’ (1964) 9 Natural Law Forum 103. 31

Lon L. Fuller, ‘The Forms and Limits of Adjudication’ (1978) 92 Harvard Law Review 353, 364. (See also T.R.S. Allan, ‘Text, Context, and Constitution: The Common Law as Public Reason’ in Douglas E. Edin (ed), Common Law Theory (CUP 2007) 202.) Since Fuller wrote, of course, Irish law has seen a significant broadening of the categories of decision-making which, to be lawful, must provide for some degree of participation from parties affected. See Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 279-81 (Hardiman J).

10

participation) in order to ensure that such participation is not rendered ineffective

or pointless.32 This recognition of the defining importance for adjudication of its

facilitation of participation by the parties shows that the adjudicative function

demands more than just impartiality. As Fuller put it:

We cannot define a judge simply as one who is bound to reach his

decisions impartially; such a definition would not distinguish him from

many others who exercise powers of government. A judge is one who

decides disputes within an institutional framework assuring to the

litigant a collaborative role, which consists in the opportunity to state,

prove, and argue his case. This participation of the affected party

loses its point if the litigants talk past one another, so that all each

says is irrelevant to the other’s conception of the issues involved in

their controversy.’33

One might add to this the ‘talking past’ one another which also occurs where

matters not raised or relied upon by the parties turn out to be material to the

conclusions reached by an adjudicator and no opportunity is given to the parties

to comment upon them before the decision is finalised.

It is obvious that the elaborate machinery for affording argumentative

participation found in the practice and procedure of the superior court are not

necessary for every form of adjudication. But, again, any adjudicative process

should, of its essence, be governed by the same spirit or underlying principle of

facilitating effective participation by the parties. This principle applies whether the

process is at the adversarial or inquisitorial end of the procedural spectrum as

traditionally conceived.

These cursory jurisprudential musing lead to an unsurprising conclusion. The

essence of the general right to fair procedures which is enjoyed by any party to an

adjudicative process worthy of the name compromises at least three more specific

rights which can be summarised thus:

(1) Right to reasonable notice of claims being made;

(2) Right to reasonable opportunity to make representations to decision-

maker in respect of those claims before a decision is made;

(3) Right to an impartial or unbiased hearing and determination.34

The first two rights facilitate meaningful participation by the parties and thereby

increase the likelihood that all relevant considerations will be brought to the

attention of the decision-maker. The third right seeks to minimise the potential for

irrelevant considerations to be taken into account or to appear to be taken into

account.

32 Fuller, ‘The Forms and Limits of Adjudication’ (1978) 92 Harvard Law Review 353, 365, 382-4.

33 ‘Lon L. Fuller, Anatomy of the Law (Pelican Books 1971) 154 (emphasis added).

34 See cases cited at note 13 above.

11

The identification of these two formal principles of adjudication and the three

rights constitutive of fair procedures is perhaps not much of an advance on the

discussion in section 1 but it provides at least a solid touchstone for any

assessment of what fair procedures might require in the context of any

construction adjudication.35 It is also a modest improvement on the laconic

guidance offered by the Act36 and the draft code of practice.37 Nevertheless, for

further guidance one should certainly supplement one’s prudential application of

these first-principles with a consideration of the relevant jurisprudence of the Irish

courts.

2.2 Irish precedents on determining the requirements of fair procedures

The judgment of Macken J in Dellway Investments Ltd v NAMA38 throws some

useful light on what sort of considerations should generally be taken into account

when trying to discern the concrete consequences of respecting an individual’s

right to fair procedures in any given scenario. In that case the Supreme Court held

that the National Asset Management Agency was required to give borrowers an

opportunity to be heard before their loans were transferred from commercial

banks to the agency. The Court stressed the reputational impact such a transfer

might have and it also noted that the statutory powers of the Agency were far

more extensive than those enjoyed by commercial banks. Applying standard East

Donegal principles the Court rejected a construction of the National Management

Agency Act 2009 which would have wholly excluded the right to fair procedures in

the circumstances. In particular, the Court was expressly concerned with only one,

albeit fundamental, aspect of the right to fair procedures, namely the bare right to

be heard. Nevertheless, it is submitted that the following observations of Macken J

are of wider relevance:

So fundamental to administrative law is the principle audi alteram

partem, that it may well that [sic] little is said as to its applicability in

recent case law, save almost in passing. It seems to me, however, that the

particular value underlying a procedural fairness rule of this nature

relates to the principle that the individual affected by a decision should

have the opportunity to present his case fully and fairly, and have a

decision affecting his rights, interests or even privileges made using a fair

and impartial process. That of course will depend also on the

appropriateness of the process to any statutory, institutional and/or

35 A similar trio of fair procedures ‘rights’ was derived from the common law rules of natural justice

by the Court of Appeal in AMEC Capital Projects Ltd v Whitefriars City Estates Ltd [2005] BLR 1 at 6 (Dyson J) (overturning High Court finding of apparent bias on the part of a construction adjudicator). 36

Section 6(8) of the 2013 Act states:

‘The adjudicator may take the initiative in ascertaining the facts and the law in relation to the payment dispute and may deal at the same time with several payment disputes arising under the same construction contract or related construction contracts.’

37 Paragraph 3 of the draft code of practice provides:

‘The adjudicator shall observe the principles of procedural fairness and act impartially and independently and without bias.’

38 [2011] 4 IR 1.

12

particular context in which the decisions are made. Clearly, that context

must play a particularly important role in the assessment of the fair

procedure in issue, in this case the right to be heard. There are several

general criteria which could be propounded, I believe, for the purposes of

assessing whether, in a given case, fair procedures require that a person

be heard before a decision is made, including, for example: (a) the nature

of the decision; (b) the nature of the statutory scheme; (c) the importance

of the decision to the person invoking the right - in this case - to be heard;

and (d) the choice of procedure, if any, adopted by the decision-maker.

There may be others, such as legitimate expectation, and so forth, but

the above are ones which resonate in the case law in this jurisdiction…39

It would seem to follow that, at the very least, considerations such as these should

also be taken into account when assessing whether, in a given case, fair

procedures require that some particular procedural right should be acknowledged

by an adjudicator (e.g. right to an oral hearing, right to cross-examine etc.) and

what that should mean in concrete terms. Such an analysis will therefore require,

at a minimum, consideration of the relevant statutory provisions (2.3) in light of

any case law addressing similar questions of fair procedures in respect of

analogous statutory bodies or quasi-judicial tribunals (2.4.1-6). It is to these

matters that I now turn.

2.3 The nature of construction adjudication under the 2013 Act

The 2013 Act introduces into Irish law a statutory mode of dispute resolution for

the construction industry that has been operational in several other common law

jurisdictions, beginning with the UK, for more than a decade.40 It is clear from the

Act itself and from those foreign precedents upon which it has clearly been

consciously modelled, that this class of dispute resolution is typically characterised

by the following five features:41

39 Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 341-2 (Macken J) (emphasis added). The

judgment of Hardiman J also includes (at 293) a valuable list of factors which he believed relevant for deciding whether the case was one to which the principles of constitutional justice did not apply. 40

UK: Housing Grants, Construction and Regeneration Act 1996; and Local Democracy, Economic Development and Construction Act 2009.

New Zealand: Construction Contracts Act 2002.

Singapore: Building and Construction Industry Security of Payment Act 2004.

Australia: Commentators on the different legislative schemes of the various Australian states distinguish between ‘East Coast’ and ‘West Coast’ models, with the latter most closely resembling the UK regime. See generally Hudson’s Building and Engineering Contracts (12

th edn, Thomson

Reuters, London 2010) at [11.014-017] and [11.053-066; and Robert Fenwick Elliott and Jeremy Coggins, ‘Adjudication Down Under: A survey of the Adjudication Legislation in Australia’ (2007) 23(5) Construction Law Journal 364. 41

For discussions concisely comparing and contrasting construction adjudication with other modes of dispute resolution along the spectrum from informal agreement to litigation see G. Brian Hutchinson, Arbitration and ADR in Construction Disputes (Thomson Reuters, Dublin 2010) Chapter 2; and Henry Brown and Arthur Marriott, ADR Principles and Practice (3

rd edn, Thomson Reuters,

London 2011) pp 19-24. For specialist texts on construction adjudication in the UK see: Coulson on Construction Adjudication (2

nd edn, Oxford University Press, Oxford 2011); and Dominique Rawley et

al, Construction Adjudication and Payments Handbook (Oxford University Press, Oxford 2012).

13

(a) an underlying legislative policy of ‘pay now, argue later’42 intended to

alleviate the risk of cash-flow problems on the part of contractors as a

result of disputes arising during the construction process, and to that end:

(b) a (deliberately) speedy process to ensure a relatively rapid post-referral

appointment43 and decision;44

(c) an informal45 and inquisitorial46 process adequate for the administration of

‘rough justice’47;

(d) the absence of an appeal from the decision of an adjudicator; 48

(e) a decision which is binding49 and, to that extent, enforceable50 but does

not finally determine the rights of the parties, i.e. enjoys only so-called

‘temporary finality’51 pending the final determination of the dispute by

arbitration, litigation or agreement.52

In the following sub-section each of these features shall be briefly considered in so

far as they are relevant to the question of what fair procedures requires and in

light of precedents relating to other adjudicative decision-making processes and

bodies.

42 See cases cited in Hudson’s Building and Engineering Contracts (12

th edn, Thomson Reuters,

London 2010) at 11.010 note 22. 43

See section 6(3) and 6(4) of the 2013 Act. 44

See section 6(6) and 6(7) of the 2013 Act. Elsewhere default time limits for the carrying out of the adjudication and delivery of a decision vary from 14 days (Singapore) to 20 days (New Zealand) to 28 days (UK). 45

See section 6(8) of the 2013 Act and draft code of practice (discussed at 3.2 below). 46

See section 6(9) of the 2013 Act. Its effect is summarised thus at paragraph 19 of the draft code of practice:

‘The adjudicator shall reach a decision within 28 days of the date that a referral is made. This period can be extended by a further 14 days with the consent of the Referring Party or such longer period as is agreed by the parties.’

47 See, e.g., Gipping Construction Ltd v Eaves Ltd [2008] EWHC 3134 (TCC) at para 8 (Akenhead J):

‘This court (the Technology & Construction Court) and the Court of Appeal has said on many occasions that adjudication is a form of rough justice, in the sense that within a very short period of time (28 days usually) the adjudicator has to receive submissions and evidence from the parties and produce his or her decision; inevitably the justice that is meted out is not always as pure and as well prepared for as cases which proceed to a full trial in this court or to a substantive hearing before an arbitrator.’

48 Hudson notes that (as of 2010) only the Australian state of Victoria provided for a statutory right of

review of an adjudicator’s decision. Hudson’s Building and Engineering Contracts (12th

edn, 2010) at [11.004]. 49

See section 6(10) and 6(12) of the 2013 Act. 50

Section 6(11) of the 2013 Act. 51

Hudson’s Building and Engineering Contracts (12th

edn, Thomson Reuters, London 2010) at 11.014. 52

See section 6(10) of the 2013 Act. Note that care should be taken in formulating terms of settlement in respect of disputes which have been referred for adjudication under section 6 as it should be made clear whether the settlement enjoys the same status as an adjudication decision (and hence does not preclude a final determination of the same matters by arbitration or litigation) or is intended to ‘finally’ settle the rights of the parties. See Foskett, The Law and Practice of Compromise (7

th edn, 2010) at 31.68.

14

In the remainder of this sub-section, however, I wish to consider the logically prior

question of whether construction adjudication as provided for in the 2013 Act

does engage a party’s constitutional right to fair procedures in the first place. In

my opinion it does and, far more importantly, this is also the opinion (expressed

extra-judicially) of at least one member of the Supreme Court.53 Possible

considerations weighing for and against this view include the following:

The construction adjudication process and the authority of the adjudicator

over the parties is ‘permitted, provided for, or prescribed’ by an Act of the

Oireachtas.54

As the decision of the adjudicator is binding and enforceable (pending final

resolution of the dispute by arbitration, litigation or agreement) there is ‘a

real risk’ that it will have ‘material practical effects on the exercise and

enjoyment of’55 a party’s rights (or that a party will be ‘adversely affected’56)

in the event that there is an adverse decision.

The Act confers an immunity and protection on an adjudicator (expecting

bad faith) in respect of any form of subsequent challenge to the

adjudication decision or any claim for compensation.57

There is no appeal from a decision of the adjudicator provided for under the

Act and the decision is effective immediately and for such a period of time

(likely not insubstantial) as may elapse until any contrary and final

determination of the matter occurs through arbitration, litigation or

agreement. In this regard the case of McNamee v Revenue Commissioners58

refers. It concerned a challenge by way of judicial review to a notice of

opinion issued to the applicant by the Revenue Commissioners pursuant to

section 811 of Taxes Consolidation Act 1997 (as amended). The section gives

the Revenue certain powers (subject to appeal) to reverse, or set at nought,

arrangements deemed to be tax avoidance schemes or transactions. One of

the arguments made by the applicant was that he did not have sufficient

opportunity to make representations as to (i) why the Revenue should not

form the opinion it did and (ii) why this was not an appropriate case for the

Revenue even to invoke section 811. In rejecting this argument McGovern J

noted the extensive rights of appeal provided for under the statute59 and

53 See the lecture of Mr Justice Clarke (at note 1 above) at p 6. Moreover, whether one agrees with

this assessment or not, it would appear prudent from a purely pragmatic perspective for all parties to operate on the assumption that it is. 54

East Donegal Co-Operative v Attorney General [1970] IR 317 at 341 (Walsh J). 55

Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 328 (Fennelly J). 56

Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 289 (Hardiman J). 57

Section 6(14). The statutory conferral of an immunity from suit on the decision-maker was deemed a relevant consideration in Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 293 (Hardiman J). 58

[2012] IEHC 500 (McGovern J). 59

Section 811(7) provides that any person aggrieved may, by notice in writing within 30 days of the date of the notice of opinion, appeal to the Appeal Commissioners. Furthermore, if the taxpayer is dissatisfied with the outcome of the hearing of the appeal before the Appeal Commissioners, he has a right to a further appeal by way of rehearing to the Circuit Court. The taxpayer also has a right to

15

that a section 811 notice did not become effective until the appeal process

was exhausted or if there is no appeal to the Appeal Commissioners, until

after the period for appealing had elapsed. In this regard the Court

observed:

45. An important factor in determining whether a right to make

representation exists at all is whether a person affected by a decision has

a right of appeal. In Dellway, Macken J. stated, after a discussion of

"fairness of procedures", that:-

"If anything, the scale of the NAMA statutory discretion and its

statutory powers, and the fact that there is no appeal from its

decision to acquire eligible assets referred to above,

emphasises the importance of scrupulous adherence to the

rules of natural justice."

46. A key factor may be that a decision does not come into effect until the

appeal has been heard or, if no appeal is taken, until the period for

appeal has elapsed. …

47. In Gammell v. Dublin County Council [1983] I.L.R.M. 413, the court

was dealing with an order prohibiting the erection of temporary

dwellings which had been made under the Local Government (Sanitary)

Services Act 1948. Referring to the right of aggrieved persons to apply to

the Minister for the Environment within fourteen days concerning such a

notice, Carroll J. held that this sufficed for compliance with the audi

alteram partem rule. At p. 417, she stated:-

"There is machinery set up under the section whereby an

aggrieved party can make representations why the order

should not come into operation. If successful the order is

annulled by the Minister and it never becomes operative. This

is very different to the Ingle60 case and the Moran61 case where

the revocation of the licence became operative immediately

and of necessity there had to be a time lag between the

revocation and the determination of an appeal in the District

Court."62

The case of Ingle v O’Brien63 referred to by Carroll J is instructive. In holding

that the decision by An Garda Síochána to revoke a taxi licence pursuant to

powers conferred by statutory regulations had breached the rule of audi

alteram partem and was therefore invalid despite a right of appeal to the

District Court, Pringle J concluded in Ingle:

appeal on a point of law (by way of Case Stated) to the High Court from any decision of the Appeal Commissioners, or of the Circuit Court. 60

Ingle v O’Brien (1975) 109 ILTR 7. 61

Moran v Attorney General [1976] IR 400. 62

McNamee v Revenue Commissioners [2012] IEHC 500 (McGovern J) (emphasis added). 63

(1975) 109 ILTR 7.

16

As regards the submission that the licence holder is sufficiently protected

by the right of appeal under which the principles of natural justice would

be complied with, I cannot accede to this submission. The revocation of a

licence to drive public service vehicles, even for a short period pending an

appeal, may seriously damage the holder's livelihood.

It does not seem to be much of a stretch to say that, similarly, the binding

and enforceable requirement to pay a sum to a contractor on foot of an

adjudication decision may seriously damage the payer’s livelihood. The

obvious example being where arbitration or litigation subsequently

determines that the payment was not due but the payee has become

insolvent in the interim period.64

As against the foregoing points, possible considerations weighing against the view

that construction adjudication is subject to the requirements of constitutional

justice and fair procedures include:

The legislative intent, as discerned from the terms of the 2013 Act, for a

speedy and, by reasonable implication,65 relatively informal process.

The resulting decision has a ‘temporary or interlocutory’66 character and any

effect on or interference with a party’s contractual or other rights is (legally

speaking) of a provisional or interim nature.

If the adoption of such a summary process, even as an interim measure, is

an interference with the right to fair procedures of the parties, it is arguably

a proportionate one in that it is restricted to a defined class of disputes (i.e.

‘any dispute relating to payment arising under the construction contract’)

with a view to addressing a particular mischief.

It is not necessary nor, arguably, probable that any reputational harm will

result from an adverse decision in respect of a payment dispute under a

construction contract.

The last point is an obvious red herring. While reputational harm was a factor at

play in the decision of the Supreme Court in Dellway, there was no suggestion that

it is always a relevant consideration. It is sufficient that a party’s property rights (in

64 For cases where a licensing decision’s potential impact on the right to earn a livelihood or business

interests appeared to influence the court’s recognising of a duty to comply with fair procedures see Hogan & Gwynn Morgan, Administrative Law in Ireland (4

th edn, Round Hall, Dublin 2010) at

14.193n. 65

For whatever reason the 2013 Act omits any express prescription as to the informality of the procedures to be adopted, in contrast to, for example, the Residential Tenancies Act 2004 and the Central Bank and Financial Services Authority of Ireland Act 2004 (both discussed below). Unlike those two acts, statutes prescribing informality in procedures typically relate to family or medical matters or concern vulnerable persons and tend not to concern commercial matters. See, e.g., Civil Partnerships and Certain Rights and Obligations of Cohabitants Act 2010, section 144(1); Freedom of Information Act 1997, section 37(6); Hepititis C Compensation Tribunal Act 1997, section 3(11); Domestic Violence Act 1996, section 16(3)(a); Child Care Act 1991, section 29(4); Judicial Separation and Family Law Reform Act 1989, section 33(3); Status of Children Act 1987, section 12(3). 66

To borrow a phrase from Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 293 (Hardiman J).

17

the form of contractual entitlements) may be adversely affected or interfered with

by an adjudicator’s decision.

With respect to the second point and third points, the cases already considered

above would appear to indicate that the interlocutory status of a decision-making

process does not necessarily place it beyond the reach of constitutional justice

and the requirements of fair procedures, particularly where any decision is

effective pending any further or final determination.

Finally, and with respect to the first bullet point, it should be noted that the 2013

Act is not unique in seeking to establish a relatively speedy and informal dispute

resolution process. Other examples to be found on the Irish statute book include

the statutory adjudication provided for under the Residential Tenancies Act 2004

(as amended)67 and the Financial Services Ombudsman created by Part VIIB of the

Central Bank Act 1942 (as inserted by section 16 of the Central Bank and Financial

Services Authority of Ireland Act 2004). The Residential Tenancies Act is of little

use for the present discussion, however, as section 124(3) expressly provides that

non-compliance with ‘a requirement of procedural fairness’ in is a grounds for

resisting the enforcement by a court of any determination made under the Act.

By contrast, the extensive case law which has arisen in relation to decisions taken

by the Financial Services Ombudsman provides valuable guidance. The most

relevant provisions of Part VIIB are as follows. Section 57BB provides:

The objects of this Part are as follows:

…

(c) to enable such complaints to be dealt with in an informal and

expeditions manner.

Section 57BK provides:-

…

(4) The Financial Services Ombudsman is entitled to perform the

functions imposed, and exercise the powers conferred, by this Act free

from interference by any other person and, when dealing with a

particular complaint, is required to act in an informal manner and

according to equity, good conscience and the substantial merits of the

complaint without regard to technicality or legal form.

Of course, in light of the overriding force of constitutional considerations, any

legislative desire for speedy or low cost resolution of disputes cannot be relied

upon as conclusive grounds for restricting to a bare minimum or trumping

altogether a party’s entitlement to fair procedures in accordance with the general

principles of constitutional justice. Rather it will always be necessary to construe

and pursue any legislative objective of expediency in a manner compatible with

the basic interests protected by the constitutional guarantee of fair procedures

67 See, in particular, the long title and section 101(4) of the Residential Tenancies Act 2004 and Canty

v Attorney General [2011] IESC 27 at paragraph 8 (Denham J).

18

given all the circumstances. In J&E Davy t/a Davy v Financial Services

Ombudsman68 the Ombudsman relied on sections 57BB and 57BK(4) (quoted

above) to defend its decision not to grant the applicant an oral hearing. While

these were accepted as relevant considerations, both the High Court69 and

Supreme Court found that, on the facts of the case, the Ombudsman had

breached fair procedures in failing to allow for an oral hearing in circumstance

where there was a dispute as to material facts which required oral evidence and

cross-examination for a just determination to be made.

In sum, legislative concerns for procedural efficiency, whether expressly stated by

the Oireachtas or not, will not be treated as determinative for the question of

whether a particular decision-making process must comply with the principles of

constitutional justice and fair procedures. This was well expressed in Khan v HSE70

by McMahon J as follows:

To those involved in administration, adherence to fair procedure

standards may appear cumbersome, irritating and even irksome on some

occasions. Undoubtedly, the necessary adherence may slow down the

administrators and may not be conducive to efficiency. But that is the

way it is. The battle between fair procedures and efficiency has long since

been fought and fair procedures have won out. The insistence on fair

procedures governs all decision makers in public administration. It

governs the courts as well. None of us can ignore the principle. We might

wish it were otherwise. We might like to cut through procedural niceties

to secure what we perceive as justice in a more expeditious way but

unfortunately for decision makers that is no longer an option available to

them. It is not sufficient that we justify our decision by alleging that we

were focusing on the ultimate objective. It is not sufficient that we were

doing our best. It is not sufficient to say that we were motivated by public

health and safety objectives. Fair procedures are at the very foundation

of all legal systems and all decision makers must observe them whether

we like it or not. Fair procedures are necessary for the common good.

Nevertheless, this must not be taken to imply that a legislative intent for

informality and expedition in a dispute resolution process should be set at nought.

Rather, as was noted by the High Court in J&E Davy t/a Davy v Financial Services

Ombudsman, such an intention can and should still be given effect in the manner

in which any oral hearing is ultimately conducted:

Where there is a requirement that an oral hearing should take place

then, in the context of the statute requiring informality and expedition,

that oral hearing must be expressly limited to the examination of those

witnesses whose testimony is inescapably necessary for the purpose of

68 [2010] 3 IR 324 (SC).

69 J&E Davy t/a Davy v Financial Services Ombudsman Ireland [2008] 2 ILRM 507.

70 [2008] IEHC 234 at p 15, approved by Dellway Investments Ltd v NAMA [2011] 4 IR 1 at 280

(Hardiman J).

19

resolving a disputed issue of fact which cannot otherwise be fairly

decided.71

Similarly, in Lyons v Financial Services Ombudsman72 Hogan J noted that

It goes without saying in the context of an adjudicatory system which is

statutorily designed to be informal and expeditious that the courts should

be reluctant to impose some form of adversarial court-style model…73

Indeed, as MacMenamin J. pointed out in Ryan,74 if such a model were in

fact to be imposed on the Ombudsman, it would mean in reality that the

office simply could not function. The FSO cannot be regarded as some

form of miniature version of the Commercial Court and … it could not

practically function if this is what was expected of it.

2.4 Irish precedents on specific aspects of fair procedures

There can be little doubt from what has been said that any adjudicator acting

pursuant to the 2013 Act should, at a minimum, ensure that the parties’ right to

be heard is respected. In the context of an inquisitorial process and the extremely

tight timeframe envisaged by the Act, however, the real question is what such a

right might entail in any given case. This question is too open-ended and

potentially vast to allow for any full answer here. Accordingly I limit myself to

some brief comments on existing Irish case law on the following points:

Adjudication in the absence of co-operation from a party (2.4.1).

Reliance by adjudicator on matters not addressed by or put to the parties

(2.4.2).

Decision to hold an oral hearing (2.4.3).

Decision to admit hearsay evidence (2.4.4).

Decision to permit cross examination (2.4.5).

Nature of the duty to give reasons (2.4.6).

2.4.1 Adjudication in the absence of co-operation from a party

Where a party to a referred dispute fails or refuses to engage or co-operate

properly or at all with the adjudication process, what effect does this have on the

71 J&E Davy t/a Davy v Financial Services Ombudsman Ireland [2008] 2 ILRM 507 at para 38

(Charleton J). 72

[2011] IEHC 454 at paragraph 21. 73

Citing to: ‘the comments in this regard of Charleton J. in J & E Davy v. Financial Services Ombudsman [2008] IEHC 256 and those of MacMenamin J. in Ryan v. Financial Services Ombudsman, High Court, 23 September 2011.’ 74

I have not been able to locate a written judgment matching the description given by Hogan J, i.e. Ryan v Financial Services Ombudsman, High Court, 23

rd September 2011, MacMenamin J.

20

adjudicator’s duty to respect that party’s rights to fair procedures?75 In the case of

other statutory decision-making bodies, express provision is sometimes made for

such circumstances and different approaches have been adopted.76 Paragraph 22

of the draft code of conduct provides the following useful guidance:77

Non-Compliance

22. If, without showing sufficient cause, a party fails to comply with any

request, direction or timetable of the adjudicator made in accordance

with his powers, fails to produce any document or written statement

requested by the adjudicator, or in any other way fails to comply with a

requirement under these provisions relating to the adjudication, the

adjudicator may

a) continue the adjudication in the absence of that party or of the

document or written statement requested,

b) draw such inferences from that failure to comply as circumstances

may, in the adjudicator’s opinion, be justified, and

c) make a decision on the basis of the material properly provided.

It seems reasonable that, in the circumstances described in paragraph 22, the

party in default may rightly be deemed to have waived certain entitlements under

the right to fair procedures. Such a waiver would operate as a bar, for example, on

any future challenge by the party to the decision on the grounds of a breach of fair

procedures where the facts of the alleged breach were attributable to the party’s

own non-compliance with the adjudication process. A number of useful

authorities are cited by Mills et al in respect of analogous situations in which a

registrant is neither represented nor in attendance at a professional disciplinary

75 A separate question may arise as to the effect which the non-attendance by one party at an oral

hearing may have on the right to fair procedures of the other party, e.g. where such non-attendance causes one party to be exposed to oral cross-examination without an opportunity to similarly examine the other side. See 2.4.5 below. 76

For example it would appear from the terms of section 104(4)(e)-(f) of the Residential Tenancies Act 2004 that a Tribunal hearing appeals under the Act is entitled, and perhaps even required, to proceed to hear and determine disputes notwithstanding that one (or possibly even both) of the parties may not be in attendance at or otherwise taking part in the proceedings before the Tribunal. By comparison, an equivalent provision in the regulations governing the procedure of the Employment Appeals Tribunal appears, at least on its face, to be more permissive than prescriptive in respect of the deciding of an appeal in the absence of one of the parties: ‘16. If, after notice of a hearing has been duly given, any of the parties fails to appear at the hearing, the Tribunal may determine the question under appeal or may adjourn the hearing to a later date: provided that before determining the question under appeal the Tribunal shall consider all the evidence before it at the time of the hearing.’ Redundancy (Redundancy Appeals Tribunal) Regulations 1968 (SI No 24 of 1968). 77

Paragraph 22 is taken verbatim from ‘Scheme for Construction Contracts (England and Wales) Regulations 1998’ (SI 1998/649) at Schedule 1, para 15 – and thus includes the very strange wording at sub-paragraph (b) which has since been corrected in the English and Welsh regulations by the ‘Scheme for Construction Contracts (England and Wales) Regulations 1998 (Amendment) (England) (Regulations 2011’ (SI 2011/2333) and the ‘Scheme for Construction Contracts (England and Wales) Regulations 1998 (Amendment) (Wales) Regulations 2011’ (SI 2011/1715). For the consolidated text see Keating on Construction Contracts (9

th edn, Sweet & Maxwell, London 2012) at Appendix B.

21

hearing dealing with complaints against him or her.78 Another decision of potential

relevance is Kastrup Trae-Aluvinduet A/S v Aluwood Concepts Ltd79 in which the

High Court rejected the respondent’s claim that there had been a want of fair

procedures in an arbitration conducted in Denmark through the Danish language.

Emphasising that the respondent had failed to engage in any meaningful way with

the arbitration, MacMenamin J concluded:

41. No legal authority from any jurisdiction has been cited to me to the

effect that want of fair procedures would arise in circumstances where

the failing in question might have been immediately remediable by the

“aggrieved” party itself taking just the minimal steps required to protect

its interests. Had the respondent wished to engage with the process it

could have done so. The reason why it did not do so was not due to

matters beyond its control. It was due to choice.80

2.4.2 Reliance by adjudicator on matters not addressed by parties

Section 6(8) of the 2013 Act states:

The adjudicator may take the initiative in ascertaining the facts and the

law in relation to the payment dispute and may deal at the same time

with several payment disputes arising under the same construction

contract or related construction contracts.

Thus the Act contemplates, or at the very least permits, what is traditionally

termed an ‘inquisitorial’ process as distinct from a purely ‘adversarial’ one. The

essential difference between these two modes of adjudicative practice relates to

the right and duty of the decision-maker to adopt either a principally passive/re-

active or, alternatively, collaborative/pro-active approach to the identification of

the material points at issue between the parties and the material facts and

applicable law relevant to the just determination of those points. The default

mode of adjudication in Ireland and the common law world is adversarial but it is

not uncommon for the inquisitorial approach to be prescribed for specialised

statutory bodies charged with quasi-judicial powers and responsibilities. Examples

include the adjudication stage of the dispute resolution between residential

landlords and tenants entrusted to the Private Residential Tenancies Board,81 the

rights commissioner service under pieces of industrial relations and employment

78 See Mills, Ryan, McDowell & Burke, Disciplinary Procedures in the Statutory Professions (2011) at

5.76-78. Of particular significance is Condon v Law Society of Ireland [2010] IEHC 52 (Kearns P) at pp 17, 20-1; and O’Callaghan v Disciplinary Tribunal [1999] IEHC 136 (McCracken J) at p 10. 79

[2009] IEHC 577. 80

Emphasis added. 81

See Residential Tenancies Act 2004, section 97(2): ‘…the adjudicator…shall inquire fully into each relevant aspect of the dispute concerned and provide to, and receive from, each party such information as is appropriate.’

22

law legislation82 and the Refugee Applications Commissioner and Refugee Appeal

Tribunal (RAT) operating under the Refugee Act 1996 (as amended).83

With respect to fair procedures, a common ground of challenge for decision-

makers in an inquisitorial process is the fairness of deciding a case on grounds

(legal or factual) other than those raised or brought to the attention of the

adjudicator by the parties themselves.84 The Technology and Construction Court of

England & Wales (a specialist division of the High Court) has addressed this issue

on several occasions in respect of construction adjudication under the UK

legislation.85 In Ireland, we have the benefit of the following very instructive

passage from Idiakheua v Minister for Justice, Equality and Law Reform86 in which

Clarke J, upholding a challenge to the findings of the Refugee Appeal Tribunal

(RAT) for want of fair procedures, held:

It should be recalled that the process before the RAT is an inquisitorial

one in which a joint obligation is placed on the applicant and the decision

maker to discover the true facts. It seems to me that an inquisitorial body

is under an obligation to bring to the attention of any person whose

rights may be affected by a decision of such a body any matter of

substance or importance which that inquisitorial body may regard as

having the potential to affects its judgment. In that regard an

inquisitorial body may, in many cases, be in a different position to a body

which is simply required to adjudicate upon the contending positions of

two competing parties in an adversarial process. In the latter case the

adjudicator simply decides the issues on the basis of the case made

82 See, e.g., Industrial Relations Act 1969, section 13(3) which states: ‘a rights commissioner shall

investigate any trade dispute referred to him…’. 83

See Refugee Act 1996, section 11 (as amended). 84

It is interesting to note that whereas one leading UK textbook on construction adjudication recognises 8 sub-headings under the general topic of ‘Possible Grounds for a Natural Justice Challenge’, 4 of those sub-headings essential relate to this one issue, viz. ‘Denial of Opportunity to Respond to New Material’, ‘Wrongful Reliance on Third Party Advice’, ‘Deciding on a Basis Not Argued’ and ‘Improper Use of One’s Own Expertise’. See Dominique Rawley et al, Construction Adjudication and Payments Handbook (Oxford University Press, Oxford 2012) at Chapter 10. 85

For example: Cantillon Ltd v Urvasco Ltd [2003] BLR 250 at 262 (Akenhead J); ABB Ltd v BAM Ltd (2013) EWHC 1983 (TCC); and Farrelly Building Services Ltd v Byrne Brothers (Formwork) Ltd (2013) EWHC 1186 (TCC). See also the Scottish case of Ardmore Construction Ltd v Taylor Woodrow Construction Limited [2006] CSOH 03 (ScotCS) at paras 43-5 (Lord Clarke) (breach of natural justice occurring by reason of adjudicator’s failure to give an opportunity to party to address the basis for a central and substantial conclusion by the adjudicator as against that party, where such basis had not formed part of the parties’ submissions). For discussion and further case citations see generally Michael Stephens, ‘Brims Construction, Waiver and Breaches of Natural Justice’ (2014) 19(3) Bar Review 70; and Hudson’s Building and Engineering Contracts (12

th edn, 2010) at 11.036. In

considering UK precedents in this regard, however, one should note that there is no equivalent in the 2013 Act or proposed Code of Practice to be made under the Act of the following provision in the ‘Scheme for Construction Contracts (England and Wales) Regulations 1998’ (SI 1998/649) (as amended) at Schedule 1, para 17: ‘The adjudicator shall consider any relevant information submitted to him by any of the parties to the dispute and shall make available to them any information to be taken into account in reaching his decision.’ (emphasis added). For a more general caveat with respect to the precedential value of UK case law on construction adjudication see 3.1 below. 86

[2005] IEHC 150 at pp 8-10, since cited in a score of High Court decisions of which the most recent is I.G. v Sean Bellew (sitting as the Refugee Appeals Tribunal) [2014] IEHC 207.

23

whether by evidence or argument by the competing parties. However the

principles which have been developed by the courts since the decision of

the Supreme Court in Re Haughey [1971] I.R. 217 are equally applicable,

in principle, to inquisitorial bodies. The precise way in which those

principles may be applied may, of course, differ. However the substantial

obligation to afford a party whose rights may be affected an opportunity

to know the case against them remains. In those circumstances it seems

to me that whatever process or procedures may be engaged in by an

inquisitorial body, they must be such as afford any person who may be

affected by the decision of such body a reasonable opportunity to know

the matters which may be likely to affect the judgment of that body

against their interest. In the course of argument in this case it was

suggested on behalf of the RAT that it would be inappropriate for the

Tribunal either to direct the line of questioning which should be adopted

on behalf of the Commissioner or to engage in questioning itself (on the

grounds that such questioning might give rise to an appearance of bias). I

am afraid I cannot agree.

If a matter is likely to be important to the determination of the RAT then

that matter must be fairly put to the applicant so that the applicant will

have an opportunity to answer it. If that means the matter being put by

the Tribunal itself then an obligation so to do rests upon the Tribunal.

Even if, subsequent to a hearing, while the Tribunal member is

considering his or her determination an issue which was not raised, or

raised to any significant extent, or sufficient [sic] at the hearing appears

to the Tribunal member to be of significant importance to the

determination of the Tribunal then there remains an obligation on the

part of the Tribunal to bring that matter to the attention of the applicant

so as to afford the applicant an opportunity to deal with it. This remains

the case whether the issue is one concerning facts given in evidence by

the applicant, questions concerning country of origin information which

might be addressed either by the applicant or by the applicant's advisors

or, indeed, legal issues which might be likely only to be addressed by the

applicant's advisors.

In setting out the above I would wish to make clear that the obligation to

fairly draw the attention of the applicant or the applicants advisors to

issues which may be of concern to the Tribunal arises only in respect of

matters which are of substance and significance in relation to the

Tribunal's determination. … I am also satisfied it is at least arguable that

there must be some reasonable proportionality between the extent to

which attention is drawn to an issue and the importance which the

Tribunal is likely to attach to it. A mere casual reference to a matter

which turns out to be central to the Tribunal's determination may be

insufficient to meet a test of "drawing reasonable attention to factors

which may to influence the Tribunal's determination".87

87 Idiakheua v Minister for Justice, Equality and Law Reform [2005] IEHC 150 at pp 8-10 (Clarke J)

emphases added. See also Nguedjdo v Refugee Applications Commissioner (unreported, 23rd

July

24

2.4.3 Decision to hold an oral hearing

The right to be heard does not necessarily give rise to a right to an oral hearing.

The general position was usefully summarised in Star Homes [Middleton] Ltd v The

Pensions Ombudsman88 as follows:

The entitlement to an oral hearing varies depending on the circumstance

of each case. There is no general right to an oral hearing. This is clear

from the case of Galvin v The Chief Appeals Officer [1997] 3 I.R. 240. …

[where] Costello P. stated:-

“There are no hard and fast rules to guide the appeals officer

or, on an application for judicial review, this Court, as to when

the dictates of fairness require the holding of an oral hearing.

The case (like others) must be decided on the circumstances

pertaining, the nature of the inquiry being undertaken by the

decision-maker, the rules under which the decision maker is

acting, and the subject matter with which he is dealing…”

Arguably the most useful precedents for the question of when a construction

adjudicator is required by constitutional justice to hold an oral hearing are those

which address the same point in the analogous context of the informal and

inquisitorial process by which the Financial Services Ombudsman investigates and

adjudicates complaints made by consumers about regulated financial service

providers. The point has been considered in quite a number of cases89 but a long

story is cut short by the following helpful passage from the latest judgment in this

line of authorities:90

21. … Where … the conflict of fact is a stark one and the resolution of this

conflict is central to the fair disposition of the complaint, then it is

impossible to avoid the conclusion that some form of oral hearing is

objectively necessary in order to give effect to this constitutional

guarantee.

2003, High Court, White J, ex tempore) which was cited with approval by Clarke J in Idiakheua. A similar question may arise with respect to the granting of reliefs not formally sought or opposed by the parties. See Galway Mayo Institute of Technology v Employment Appeals Tribunal [2007] IEHC 210 at paras 24-28 (Charleton J) (discussing the point in context of a more adversarial process). 88

[2010] IEHC 463 (Hedigan J) at para 7.1. 89

For example:-

Oral hearing deemed necessary for fair procedures: J&E Davy (T/a Davy) v Financial Services Ombudsman [2010] 3 IR 324; Hyde v Financial Services Ombudsman [2011] IEHC 422; Lyons v Financial Services Ombudsman [2011] IEHC 454; Murphy v Financial Services Ombudsman [2012] IEHC 92; Smith v Financial Services Ombudsman [2014] IEHC 40.

Oral hearing not deemed necessary for fair procedures: Cagney v Financial Services Ombudsman (unreported, 25

th February 2011, High Court); Molloy v. Financial Services Ombudsman (unreported,

15th

April 2011, High Court); Caffrey v Financial Services Ombudsman [2011] IEHC 285; and Carr v Financial Services Ombudsman [2013] IEHC 182. 90

O'Neill v Financial Services Ombudsman [2014] IEHC 282 (Hogan J).

25

…

24. … While it may be true that not all of the decisions of this Court on

the question of whether the FSO should have held an oral hearing can be

perfectly reconciled, nevertheless the underlying theme which emerges

from this corpus of case-law is that an oral hearing is necessary where

there is a manifest conflict of fact, the resolution of which is critical to the

outcome of the appeal.91

2.4.4 Decision to admit hearsay evidence

The law relating to hearsay evidence is as involved as it is fundamental.92 For

present purposes, however, I propose only to offer a working definition of hearsay

and a few points on the admissibility of such evidence in less formal decision-

making processes.

Perhaps the most useful and relatively straightforward definition of hearsay

evidence is that approved by the Supreme Court in the leading case of Eastern

Health Board v MK93

Testimony in court, or written evidence, of a statement made out of

court, the statement being offered as an assertion to show the truth of

matters asserted therein, and thus resting for its value upon the

credibility of an out of court asserter.

A practical example from the field of construction adjudication is where (a) an

architect reports to the adjudicator a statement made to the architect by a

foreman about some matter now in dispute between the contractor and employer

and (b) the employer is relying on the architect’s report of the conversation to

prove (as against the contractor) the truth of what was stated by the foreman.94

The scope and purpose of the traditional common law rule against hearsay

evidence was addressed in Eastern Health Board.95 The case primarily concerned

the applicability of the rule to wardship proceedings. In overturning the High

Court decision to allow the hearsay evidence, the Supreme Court ruled that while

in principle hearsay evidence was admissible in wardship proceedings a court

would always be required to determine if it was necessary in the circumstances of

each individual case to adduce such evidence and if so in what circumstances.96

The same can be said of proceedings before informal or quasi-judicial tribunals for

91 Emphases added.

92 It takes up nearly 100 pages of the approximately 700 pages in Declan McGrath, Evidence

(Thomson Round Hall, Dublin 2005). See ibid. at Chapter 5. 93

[1999] 2 IR 99 at 123 (Keane J). 94

Note: It would not be hearsay to offer the architect’s report of the conversation as proof that the foreman had actually made the statement. 95

See, in particular, [1999] 2 IR 99 at 108-110 and 114-5 (Denham J), 119 (Barrington J) and 123-5 (Keane J). 96

[1999] 2 IR 99 at 114-5 (Denham J).

26

it is well established that the general rule against admitting hearsay evidence does

not necessarily apply to hearings before such bodies,97 nor indeed are the complex

common law exceptions to the rule of direct relevance to the workings of such

tribunals. Rather, as Hogan & Gwynn Morgan have put it:98

The long-established evidential rule excluding hearsay (save where an

exception applies) is obviously grounded on the same policy as the

constitutional justice rule requiring an oral hearing in certain

circumstances. But it is probably correct to take the law, in regard to (say)

tribunals,99 to be that hearsay evidence is not as such excluded; but

rather that, where the circumstances are that the absence of this

opportunity would be unfair, a person adversely affected by evidence

must be allowed an opportunity to test it by cross-examination. In other

words, the cash value in the difference lies in the fact that the common

law rule operates inflexibly; whereas, where an applicant is relying on the

constitutional justice principle, they must be able to demonstrate that, in

the circumstances, the lack of an opportunity to cross-examine would

produce unfairness.

2.4.5 Decision to permit cross examination

The right to cross-examine is an aspect of the right to fair procedures. It is not

necessary that an opportunity to cross-examine always be made available,100 but

case law would seem to suggest that it must be permitted where:

the inquiry in question may result in findings capable of interfering with a

person’s constitutional right to a good name;101 or

there is a conflict of ‘material’102 or ‘essential’103 fact on the face of the

documents before the tribunal such that a ‘fair determination’104 or ‘true

97 See, e.g., Kiely v Minister for Social Welfare [1977] IR 267 at 281 (Henchy J); and Borges v Fitness to

Practise Committee [2004] 1 IR 103 at 113 (Keane CJ). 98

Hogan & Gwynn Morgan, Administrative Law in Ireland (4th

edn, Round Hall, Dublin 2010) at 14.63 (emphasis added). 99

Hogan & Gwynn Morgan use the term ‘tribunal’ in their text to refer to any quasi-judicial body created by statute. 100

See, e.g., Maguire v Ardagh [2002] 1 IR 385 at 740 (Geoghegan J):

‘There is … no absolute right to cross-examine. As to whether there should be a right to cross-examine or not in any given instance depends on the circumstances. There was nothing wrong in principle with a ruling that permission had to be obtained to cross-examine. But such permission would have to be based on the significance of the witness to be cross-examined and the nature of the evidence of that witness which might be adverse to the interests of the cross-examiner's client. The granting or withholding of the permission could not normally be based on any kind of detailed inquiry as to the nature of the cross-examination itself because surprise can often be the essence of cross-examination.’ (emphasis added).

101 In Re Haughey [1971] IR 217 at 263 (Ó Dálaigh CJ); Maguire v Ardagh [2002] 1 IR 385 at 550

(Keane CJ); Borges v Fitness to Practice Committee [2004] 1 IR 103 at 113 (Keane CJ). 102

J&E Davy t/a Davy v Financial Services Ombudsman [2010] 3 IR 324 at 364 (Finnegan J). 103

Kiely v Minister for Social Welfare [1977] IR 267 at 281 (Henchy J):

27

judgment’105 or ‘fair adjudication’106 of the fact of the matter cannot be

made without oral testimony tested by cross-examination.

Some further considerations in respect of the right to cross-examination are as

follows:

Decisions on the admissibility of hearsay evidence and the necessity for

cross-examination will often be closely related. For, as the Supreme Court

has stated, hearsay evidence is typically ‘excluded in our law because the

person is not present in court to give evidence on oath or affirmation and to

be cross-examined and the court is thus deprived of the normal methods of

testing the credibility of the witness.’107 Thus it seems doubtful whether

hearsay evidence could ever be validly admitted or relied upon by an

adjudicator in respect of an allegation against a party which reflects on that

person's good name or reputation.

It should be remembered that even in circumstances where the above

principles would seem to require that an adjudicator allow some

opportunity for cross-examination to take place, the adjudicator remains

entitled to limit or curtail examination of witnesses to what is necessary and

appropriate for the fair adjudication of the conflict at issue.108

‘Where essential facts are in controversy, a hearing which is required to be oral and confrontational for one side but which is allowed to be based on written and, therefore, effectively unquestionable evidence on the other side has neither the semblance nor the substance of a fair hearing. It is contrary to natural justice.’

104 J&E Davy t/a Davy v Financial Services Ombudsman [2010] 3 IR 324 at 365 (Finnegan J) approving

passage from judgment of the High Court. 105

Galvin v Chief Appeals Officer [1997] 3 IR 240 at 251 (Costello P) cited with approval in J&E Davy t/a Davy v Financial Services Ombudsman [2010] 3 IR 324 at 364 (Finnegan J) 106

J&E Davy Trading as Davy v Financial Services Ombudsman [2008] 2 ILRM 507 at para 33 (Charleton J). 107

Eastern Health Board v MK [1999] 2 IR 99 at 123 (Keane J). See also Re Bovale Developments DCE v Bailey [2011] IESC 24 (Hardiman J): ‘I wish to make it clear that in my view the fundamental objection to the admissibility of hearsay evidence in proceedings before a court is that, to the extent that it is admitted it deprives the applicant of his right to cross-examine.’ 108

See generally:

M v Refugee Appeals Tribunal [2009] IEHC 331 at para 15 (Clark J):

‘The extent to which the Tribunal Member allows questioning must be a matter left to each Tribunal Member to ensure that order is maintained, that fairness and justice are applied and that the object of the appeal is achieved. The Tribunal is entitled to refuse irrelevant or repetitive questioning or, as occurred in this case, an attempt to cross examine a person who was not a witness.’ (emphasis added).

Menolly Homes Ltd v Appeal Commissioners & Revenue Commissioners [2010] IEHC 49 at para 41 (Charleton J):

‘Administrative bodies, tribunals and courts are entitled to make decisions: there is no issue of fact that cannot be decided fairly on the papers; this issue is not relevant to the point under adjudication; this cross-examination is not helping to elucidate the truth, rather it is causing confusion; the pursuit of this issue will not assist in my adjudication. They should be open to persuasion in the other direction, but that does not remove their responsibility to control a hearing fairly. A reasonable level of trust should be reposed in the decision-maker to act sensibly and judicially.’ (emphasis added).

28

Where a right to an oral hearing and to cross-examine witnesses is

established then there is authority to suggest that a party is ‘entitled to be

furnished in advance of the hearing with a list of the names of the witnesses,

their qualifications and functions, which the’109 other party may call in

evidence.

In deciding whether to permit cross-examination adjudicators should be

alive to the unfairness which can result where, for whatever reason

(including perhaps voluntary non-attendance) only one side of the dispute

has its evidence tested orally. This was addressed in emphatic terms in Kiely

v Minister for Social Welfare110 as follows:

Audi alteram partem means that both sides must be fairly heard. That is

not done if one party is allowed to send in his evidence in writing, free

from the truth-eliciting processes of a confrontation which are inherent in

an oral hearing, while his opponent is compelled to run the gauntlet of

oral examination and cross-examination. … Any lawyer of experience

could readily recall cases where injustice would certainly have been done

if a party or a witness who had committed his evidence to writing had

been allowed to stay away from the hearing, and the opposing party had

been confined to controverting him simply by adducing his own evidence.

In such cases it would be cold comfort to the party who had been thus

unjustly vanquished to be told that the tribunal's conduct was beyond

review because it had acted on logically probative evidence and had not

stooped to the level of spinning a coin or consulting an astrologer. Where

essential facts are in controversy, a hearing which is required to be oral

and confrontational for one side but which is allowed to be based on

written and, therefore, effectively unquestionable evidence on the other

side has neither the semblance nor the substance of a fair hearing. It is

contrary to natural justice.

2.4.6 Nature of the duty to give reasons

The evolution and nuances of the jurisprudence of the Irish courts as to when a

duty to give reasons may arise and the rationale behind that duty is beyond the

J&E Davy Trading as Davy v Financial Services Ombudsman [2008] 2 ILRM 507 at para 70 (Charleton J):

‘The process of examination and cross-examination should not be allowed to get out of control. … Those cross-examining can be expected to be concise, to be polite and to be professionally efficient. Cross-examination may be curtailed by reason of prolixity; it may be corrected where it oversteps the mark of a good advocate in terms of politeness and instead becomes rude; it may be restricted on matters of credit to those issues which bear a real relationship to the matter in issue; and it should be controlled so that it assists in the exercise of finding the truth.’

109 Curtin v The Irish Coursing Club [2009] IEHC 175 at p 20 (Herbert J).

110 [1977] IR 267 at 281 (Henchy J).

29

scope of this paper.111 It is sufficient here to note that recent judgments of the

Supreme Court show a marked intolerance for the failure of decision-making

bodies (whether administrative or quasi-judicial) to provide affected persons with

at least a basic statement of the material reasons for the decision.

In Meadows v Minister for Justice112 Murray CJ stated:

An administrative decision affecting the rights and obligations of persons

should at least disclose the essential rationale on foot of which the

decision is taken. That rationale should be patent from the terms of the

decision or capable of being inferred from its terms and its context.

Unless that is so then the constitutional right of access to the courts to

have the legality of an administrative decision judicially reviewed could

be rendered either pointless or so circumscribed as to be unacceptably

ineffective.

This point was developed by the Supreme Court in Mallak v Minister for Justice113

as follows:

66. In the present state of evolution of our law, it is not easy to conceive

of a decision-maker being dispensed from giving an explanation either of

the decision or of the decision-making process at some stage. The most

obvious means of achieving fairness is for reasons to accompany the

decision. However, it is not a matter of complying with a formal rule: the

underlying objective is the attainment of fairness in the process. If the

process is fair, open and transparent and the affected person has been

enabled to respond to the concerns of the decision-maker, there may be

situations where the reasons for the decision are obvious and that

effective judicial review is not precluded.

67. Several converging legal sources strongly suggest an emerging

commonly held view that persons affected by administrative decisions

have a right to know the reasons on which they are based, in short to

understand them.

Finally, in EMI Records (Irl) Ltd v Data Protection Commissioner114 the point was

emphasised again by the Court that:

111 In that regard, see the review of Irish, English and European authorities in Mallak v Minister for

Justice [2012] 3 IR 297 at 316-324 (Fennelly J). 112

[2010] 2 IR 701 at 732 (Murray CJ). 113

[2012] 3 IR 297 at 322 (Fennelly J). See also at 316 (Fennelly J):

‘The general principles of natural and constitutional justice comprise a number of individual aspects of the protection of due process. The obligation to give fair notice and, possibly, to provide access to information or, in some cases, to have a hearing are intimately interrelated and the obligation to give reasons is sometimes merely one part of the process. The overarching principle is that persons affected by administrative decisions should have access to justice, that they should have the right to seek the protection of the courts in order to see that the rule of law has been observed, that fair procedures have been applied and that their rights are not unfairly infringed.’

114 [2013] IESC 34 (Clarke J).

30

… a party is entitled to sufficient information to enable it to assess

whether the decision is lawful and, if there be a right of appeal, to enable

it to assess the chances of success and to adequately present its case on

the appeal. The reasons given must be sufficient to meet those ends.

In sum, the underlying principle or purpose which has been identified by the Irish

Supreme Court for determining the presence and scope of a duty to give reasons

is that any person affected should be in a position to ‘understand’115 the reason for

the decision so that there is no ‘deficit of ready information’116 and ‘that effective

judicial review is not precluded.’117

The matter is helpfully put beyond doubt by the draft code of practice which

states:

DECISION OF ADJUDICATOR

23. The decision of the adjudicator shall be in writing and signed and

dated by the adjudicator. Unless the parties agree otherwise in writing,

the decision shall include the reasons for the decision.118

115 Mallak v Minister for Justice [2012] 3 IR 297 at 322 (Fennelly J).

116 Rawson v The Minister for Defence [2012] IESC 26 at para 6.9 (Clarke J).

117 Mallak v Minister for Justice [2012] 3 IR 297 at 322 (Fennelly J).

118 It is interesting to contrast this approach with the reversed burden adopted in the equivalent

provision in the English and Welsh regulations which states: ‘If requested by one of the parties, the adjudicator shall provide reasons for his decision.’ ‘Scheme for Construction Contracts (England and Wales) Regulations 1998’ (SI 1998/649) at Schedule 1, para 22. This provision was relied upon in Multiplex Constructions (UK) Ltd v West India Quay Development Company (Eastern) Ltd [2006] EWHC 1569 (TCC) at para 36 (Ramsey J) for the conclusion that ‘in the absence of any other provision or a request the adjudicator does not have a duty to give reasons.’

31

3. Further practical guidance regarding fair procedures

Neither natural justice nor constitutional justice requires perfect or the

best possible justice; it requires reasonable fairness in all of the

circumstances; often it is a matter of impression as to whether or not

there was unfairness.119

The last section set out various principled considerations on a variety of common

topics which should hopefully assist adjudicators in determining how Irish courts

are likely to conceive of ‘reasonable fairness in all of the circumstances’ in the

particular context of construction adjudication. In this final section, and with an

eye to UK precedents and materials, I draw on these principles to offer some

additional guidance to minimise the risk of successful challenges based on

breaches of constitutional justice or fair procedures.

3.1 A general caveat with respect to reliance on UK materials

Given the many broad similarities between the 2013 Act and the equivalent UK

scheme, it is natural that the large volume of case law dealing with the latter will

and should be of interest to Irish lawyers if and when our new Act comes into

effect.120 The Adjudication Society and Chartered Institute of Arbitrators have also

collaborated in the preparation of a number of guidance notes, including a

valuable one on the topic of natural justice, in ‘an attempt to establish best

practice’ for adjudication in England, Wales and Scotland.121 The stated purpose of

the notes is ‘not debate all of the legal issues in an attempt to find a philosophical

answer to the many problems that could be encountered’, but instead ‘to identify a

sensible or practical approach to some of the everyday problems encountered in

adjudication.’122

It hardly need saying perhaps, but care should be exercised when relying upon UK

case law and other materials as a guide to what, in the eyes of an Irish court, fair

procedures may require of adjudication under the 2013 Act. This is so for several

reasons. The most obvious is that the UK courts are operating without any direct

equivalent to the entrenched constitutional rights and doctrines which prevail in

Irish law over the acts of the legislature and pervade virtually all aspects of judicial

review by the Irish Courts. The very different constitutional arrangement in the UK

is particularly evident in two aspects of its jurisprudence on construction

adjudication. The first is the great weight which the English courts attached to the

choice by parliament for an informal and expeditious system of construction

119 International Vessels Ltd v Minister for Marine (No. 2) [1991] 2 IR 93 at 102 (McCarthy J).

120 A useful database of such cases is available without charge on-line at <www.adjudication.org>

(last accessed 26th

June 2014). 121

‘Guidance Note: Natural Justice (1st

edn, April 2013) prepared by the Adjudication Society and Chartered Institute of Arbitrators <http://www.adjudication.org/sites/default/files/4163-1049-6768%20v%205,%20Natural%20Justice%20Guidance%20Note%20(1).pdf> (last accessed 26

th June

2014). 122

Ibid.

32

adjudication when first called upon to consider its compatibility with the general

requirements of natural justice. From the outset the specialist division of the High

Court known as the Technology and Construction Court showed a robust concern,

when dealing with natural justice based challenges to the enforcement of

adjudication decisions, to ensure the efficacy and successful functioning of the

statutory scheme.123 By contrast, such extra-curial comments as have been made

by serving Irish judges about the still to be commenced 2013 Act suggest that a

more ambivalent and less deferential attitude is likely from the Irish courts - such

as one would expect in a constitutional order where legislation is subject to rights-

based judicial scrutiny.

A second distinguishing aspect of UK law on construction adjudication is that the

Human Rights Act 1998 has been held not to apply to adjudicators.124 Hence,

challenges to enforcement of their decisions on the grounds of alleged breaches of

natural justice or fair procedures has not benefited from the additional (albeit

soft) principles of human rights review specifically provided for under the 1998

Act.125

Finally, one should also note the possibility that, even in respect of ostensibly

common law principles of natural justice, Irish and UK courts may not always

adopt the same formulations and may diverge on questions of application.126

The flip side of these points, however, is that parties involved in construction

adjudication under Irish law, and those advising them, should take account of

those UK judgments where decisions by construction adjudicators have not been

enforced for want of natural justice or fair procedures – since any conduct found

to be unacceptable in such cases is, a fortiori, quite likely to fall foul of an Irish

court also.127

123 See Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] BLR 93 at 97 (Dyson J);

Balfour Beatty v Lambeth London Borough Council [2002] BLR 228 at 301 (Lloyd QC); Carillion Construction Ltd v Devenport Royal Dockyard Ltd [2006] BLR 15 (CA) at 35 (Chadwick LJ) and other cases cited in Keating on Construction Contracts (9

th edn, Sweet & Maxwell, London 2012) at 18.018

note 98. 124

See Keating on Construction Contracts (9th

edn, Sweet & Maxwell, London 2012) at 18.051 citing to Austin Hall Building Ltd v Buckland Securities Ltd (2001) BLR 272; and Elanay Contracts Ltd v The Vestry [2001] BLR 33. 125

For a comparison of the UK and Irish statutory provisions incorporating the European Convention on Human Rights into domestic law (in particular the provisions requiring convention compatible interpretation of legislation) see Paul Brady, ‘Convention Compatible Statutory Interpretation’ (2012) 33(1) Statute Law Review 24. 126

A good example of this is the different tests adopted by Irish and English courts in respect of objective or presumed bias. See Delaney, Judicial Review of Administrative Action (3

rd edn, Round

Hall, Dublin 2013) at pp 256-267. In some cases a disparity in approaches may be predicated on differences in the underlying statutory provisions. See, for example, note 118 above. 127

For a very brief round-up of such cases see Keating on Construction Contracts (9th

edn, Sweet & Maxwell, London 2012) at 18.050. For a more detailed treatment see Dominique Rawley et al, Construction Adjudication and Payments Handbook (Oxford University Press, Oxford 2012) at Chapters 10 and 11; and Coulson on Construction Adjudication (2

nd edn, Oxford University Press,

Oxford 2011) at Chapters 12 and 13.

33

3.2 Statutory guidance for adjudicators regarding fair procedures

Section 6(8) of the 2013 Act states:

The adjudicator shall act impartially in the conduct of the adjudication

and shall comply with the code of practice published by the Minister

under section 9, whether or not the adjudicator is a person who is a

member of the panel selected by the Minister under section 8.

Paragraphs of the draft code of practice (not already discussed above128) which are

relevant to questions of fair procedures include (emphasis added):129

GENERAL PRINCIPLES

Value for Money

1. The adjudicator shall use reasonable endeavours to process the

payment dispute between the parties in the shortest time and at the

lowest cost.

2. The adjudicator shall ensure that the procedure adopted is

commensurate with the nature and value130 of the payment dispute and

shall promptly notify the parties of any matter that will slow down or

increase the cost of making a determination.

Impartiality

3. The adjudicator shall observe the principles of procedural fairness and

act impartially and independently and without bias.

Conflict of Interest

4. A person requested to act as adjudicator shall notify the parties of any

conflict of interest or external factors which would give rise to a

reasonable apprehension of bias; such a person shall decline the

appointment unless satisfied it would be appropriate to accept. After

appointment, the adjudicator shall immediately notify the parties of any

such conflict or factors that arise during the course of the adjudication.

The adjudicator shall not act as conciliator, mediator, arbitrator or

witness in any related action without the written agreement of the

parties.

…

Compliance

128 See 2.4.1 and 2.4.6 above.

129 It is instructive to read these in conjunction with the equivalent regulations for England & Wales

(as amended) which are included at Appendix B in Keating on Construction Contracts (9th

edn, Sweet & Maxwell, London 2012). 130

In The State (Healy) v Donoghue [1976] IR 325 at 350 O’Higgins CJ noted that ‘The requirements of fairness and of justice must be considered in relation to the seriousness of the charge brought against the person and the consequences involved for him.’ However paragraph 2 of the draft code of practice seems only to address the cost implications of the procedures adopted.

34

7. The adjudicator and parties to the adjudication process shall comply

with the Code of Practice.131

…

CONDUCT OF ADJUDICATION

…

Flexibility

20. For the purposes of the adjudication the adjudicator may132

a) request any reasonable supporting or supplementing documents

pertaining to the payment dispute detailed in the Referral Notice and

Notice of Adjudication,

b) invite written submissions and evidence from both parties,

c) meet jointly with, and question, the parties and their

representatives,133

d) subject to obtaining any necessary consent from a third party or

parties, make site visits and inspections or carry out tests ,

e) obtain and consider such representations and submissions as required,

and provided that the parties have been notified, appoint experts,

assessors or legal advisers,

f) give directions as to the timetable for the adjudication, any deadlines,

or limits as to the length of written documents or oral representations,

g) issue other directions relating to the conduct of the adjudication.

Compliance

21. The parties shall comply with a request or direction of the adjudicator

made in accordance with the adjudication process.

Non-Compliance134

…

3.3 Some additional suggestions for good practice

131 On its face paragraph 7’s prescription of compliance with the code by ‘parties to the adjudication’

seems to go beyond the terms of section 6(8) of the 2013 Act which states only that ‘The adjudicator … shall comply with the code of practice…’ 132

Paragraph 20 appears to be a shortened version of ‘Scheme for Construction Contracts (England and Wales) Regulations 1998’ (SI 1998/649) at Schedule 1, para 13. 133

The stipulation that meetings are held with parties ‘jointly’ is a valuable addition to the English and Welsh regulations on which this paragraph is based. The lacuna in those regulations has been filled by a series of recommendations in the Guidance Note (see note 120 above) elaborating various aspects of this requirement. 134

For text see discussion at 2.4.1 above.

35

The UK Guidance Note on natural justice135 deals with a number of other issues

and practical scenarios not covered in the previous section and for the most part

the advice given on such points seems equally applicable in an Irish context. To

conclude I consider a few of these points here, perhaps the most important being

the tension between the tight statutory deadlines and the duty to respect fair

procedures.

3.3.1 Considerations relevant at the appointment stage

There are two matters in particular which an adjudicator ought to give careful

thought to when initially approached and/or appointed:

Whether he or she has any current or past link to either of the parties (or

their representatives) or there is any other issue which may give rise to

concerns of bias (real/subjective or apparent/objective). If in doubt, the

best option is for an adjudicator is to promptly and fully disclose any

possible cause of concern to both parties and so establish whether either

has any objection to his or her proceeding with the adjudication. Where one

party has been in contact with the adjudicator prior to appointment (e.g. to

check availability) it seems wise that such communication should also be

disclosed by the adjudicator at the outset.

Whether it is likely to be possible to hear and determine the dispute in

accordance with fair procedures within the timeframe permitted by the

2013 Act given:

o the timing of the referral;136

o the nature or complexity of the dispute;

o the time which the adjudicator has available personally to

dedicate to the task during the permitted timeframe; and

o any extension of the permitted timeframe pursuant to section 6(6)

or 6(7) of the Act which can be sought and/or has been secured by

the adjudicator.

With respect to the issues of fairness raised by the time limits imposed upon the

process, it is interesting to contrast the observations of Mr Justice Frank Clarke,

135 See note 120 above.

136 The 2013 Act follows its UK counterpart in permitting a dispute to be referred to adjudication ‘at

any time’ – section 6(2), 2013 Act. This has given rise in the UK to the notorious practice of parties carefully preparing their own claim before serving notices of referral at times calculated to put the responding party at a disadvantage, e.g. immediately prior to Christmas holidays. If the right to a reasonable opportunity to respond to the case being made against one is to be meaningfully upheld, adjudicators will need to be vigilant about such ‘ambush’ referrals and take such factors into consideration when deciding whether to seek extensions of time or, failing that, whether to accept the appointment or resign. See Bovis Lend Lease Ltd v The Trustees of the London Clinic [2009] EWHC 64 (TCC) at para 50-1 (Akenhead J).

36

speaking extra-judicially,137 with the approach taken by the Guidance Note in the

UK.138 Noting the refusal of the High Court in O’Briens Irish Sandwich Bar Ltd v

Companies Acts139 to sacrifice the requirements of a fair hearing to the exigencies

of the statutory deadlines imposed by the examinership process, Mr Justice Clarke

opined:

I suppose what is relevant here is that the court took the view that it

could not dispense with fair process. The consequence was that the

examinership process came to an end and the company was liquidated.

So it seems that the need to comply with fair process overrides

practicality. One cannot simply say “I do not have time to do it properly,

so I am going to do it a lesser way”. One either has to find a way [sic],

otherwise the difficult question arises as to what a court is, or the parties

are, to do, if an adjudicator comes back and simply says “I cannot do this

in a fair way within the timeframe allowed”.140

By contrast, the non-statutory UK Guidance Note makes the following points:141

2.6. It should be remembered that in the ordinary run of the events the

parties to a construction contract are entitled to have any dispute

resolved by adjudication on an interim basis and that the broad justice of

an adjudication is likely to produce a fairer interim allocation of money

than simply leaving it in the hands of the party who happens to presently

be in possession of it.

…

2.8. The Courts recognise that adjudication ¡s a swift form of dispute

resolution which may provide only a very rough form of justice ¡n certain

instances. Hence, it can be legitimate to resolve large and factually

complex disputes by means such as spot checks.

Perhaps all that can safely be said at this point is that it would be imprudent for

parties or adjudicators to assume that the underlined conclusions from the UK

Guidance Note will prove to be accurate as a matter of Irish law.

3.3.2 Considerations relevant to the conduct of the adjudication

Much of the substantive principles have already been discussed in section 2

above. However, there are a number of very concrete practical recommendations

137 See note 1 above.

138 See note 120 above.

139 [2009] IEHC 465.

140 See note 1 above, p 11. It is perhaps apposite to recall here that section 6(17) of the 2013 Act

provides:

‘An adjudicator may resign at any time on giving notice in writing to the parties to the dispute and the parties shall be jointly and severally liable for the payment of the reasonable fees, costs and expenses incurred by the adjudicator up to the date of resignation.’

141 See note 120 above, p 7.

37

contained in the UK Guidance Note on natural justice which are worth mentioning

here:142

The adjudicator should set down a timetable for the parties to serve

submissions during the course of the adjudication.

When preparing the initial timetable and considering any further requests

for submissions, the adjudicator should consider whether additional time

will be needed to reach, prepare and issue the decision. It is preferable that

requests for additional time are dealt with at the outset of the adjudication

if they can be foreseen at that time and in any event as soon as possible.

At the outset of the adjudication, the adjudicator should direct that all

communications by one party with the adjudicator should be copied to the

other party. Similarly, the adjudicator should copy all correspondence to

both parties. Forms of communication where this is not possible, such as

phone calls, should be avoided.

If one party contacts the adjudicator directly by telephone, ideally his

administrator should deal with them and ask for the matter to be dealt with

in writing. If this is not possible or does not occur, the adjudicator should

take notes during the conversation, seek to terminate the call as soon as

reasonably possible and inform the other party of the content of the call as

soon as possible.

Adjudicators should consider the need for a hearing at the outset of the

process although in many cases it will not be possible to reach a final view

on the need for a hearing until the Response has been received highlighting

the matters in dispute between the parties.

An adjudicator ought to give both parties adequate notice of site visits and

should avoid a site visit where only one party will be present unless the

other party has agreed to that approach or is deliberately seeking to

obstruct the site visit.

3.3.3 Considerations relevant to the decision

Issues relating to decisions based on grounds not addressed by or put to the

parties and the nature of the duty on adjudicators to state reasons for a decision

have already been discussed.143 It suffices to quote the following pragmatic advice

from the UK Guidance Note:144

4.2. It is recommended that an adjudicator should address separately in

the decision each issue that has been raised by each party. If the parties’

submissions are set out in an unclear or confusing manner, consideration

142 What follows is either a verbatim or close paraphrase of passages from note 120 above, pp 8-10.

143 See 2.4.2 and 2.4.6 above.

144 See note 120 above, p 10.

38

should be given to drafting a list of issues for the parties to comment

upon prior to production of the decision.

4.3. It is, however, important to distinguish between the substantive legal

or factual issues and the evidence which goes to those issues. It is not

usually practicable for every aspect of the evidence to be meticulously

considered, weighed up and rejected or accepted in whole or in part and

an adjudicator need not do so.

Conclusion

Key aspects of the overview which this paper has attempted to provide are well

summed up in the following remarks of McCarthy J The State (Irish Pharmaceutical

Union) v Employment Appeals Tribunal:145

Whether it be identified as a principle of natural justice derived from the

common law and known as audi alteram partem or, preferably, as the

right to fair procedures under the Constitution in all judicial or quasi-

judicial proceedings, it is a fundamental requirement of justice that

person or property should not be at risk without the party charged being

given an adequate opportunity of meeting the claim, as identified and

pursued.

If the proceedings derive from statute, then, in the absence of any set or

fixed procedures, the relevant authority must create and carry out the

necessary procedures and if the set of fixed procedure is not

comprehensive, the authority must supplement it in such a fashion as to

ensure compliance with constitutional justice ...

I hope that the material set out in sections 2 and 3 of this paper proves of some

assistance to time-pressed adjudicators faced with this unvarying duty to operate

and, as necessary, ‘supplement’ the procedures for construction adjudication

under the 2013 Act in accordance with the various and variable requirements of

constitutional justice.

145 [1987] ILRM 36 at 40.